Consumer Auto Insurance

Who Needs Auto Insurance?

Auto insurance protects you from financial losses such as vehicle repairs, medical bills, and legal services that could result from an auto accident. 

Illinois law (625 ILCS 5/7-601) requires all motor vehicle owners to have minimum amounts of auto liability insurance.  In addition, lending institutions may require physical damage insurance to protect their interest in a financed vehicle.

Helpful Tips When Shopping For Insurance

• Find a reliable company.  Contact the Department of Insurance to find out if a company is licensed in Illinois.  Unlicensed companies are not required to comply with state insurance laws or participate in the Insurance Guaranty Fund which protects policyholders if a company goes bankrupt.  Check a company’s complaint ratio.  Our website lists complaint information for all companies with ten or more auto insurance complaints.  Check a company’s financial stability to ensure that it can pay its claims.
• Find a reliable agent.  Some companies sell through local agents and some through direct marketing or group plans.  If you wish to buy insurance from an agent, look in the yellow pages or ask people you know and respect for their recommendations.  Look for a licensed agent (insurance producer) who is reliable and helpful in answering any of your questions.  You can verify an agent’s licensing status by contacting our Department or visiting the Producer Licensing Record of the Producer Information section on our website.
• Shop carefully.  Insurance is expensive.  You should shop around for the best product at the best price.  The key to comparison-shopping is to determine what coverage you need, how much of it you need and what it will cost.  Obtain more than one estimate or quote.  Do not be rushed into buying a policy by high-pressure sales tactics.  Do not be misled by advertising or buy a policy simply because it is endorsed on television, radio, in newspapers or other advertisements by famous people.
• Understand what you are buying.  Ask for a detailed explanation in layman’s terms.  Don’t accept calculations or examples you don’t understand.  Remember, if it sounds too good to be true, it probably is.
• Fill out your application completely and accurately.  It is important to give correct and complete answers when applying for insurance.  If you omit or misrepresent information, the company can void the contract.

Required Auto Insurance Coverages

• Liability Coverage – Pays for bodily injury to another person or property damage you cause due to the negligent operation of a vehicle.  It may also pay if the accident was caused by a member of your family living with you or a person using your vehicle with your permission.  The coverage may also pay for a legal defense if you’re sued because of the accident.  Liability coverage is often split into two separate coverages:
  1. Bodily Injury (BI) – Pays for costs due to injury or death to a pedestrian(s) or person(s) in another car.  It may also cover your passengers’ injury costs as long as they aren’t members of your household.  Illinois law (625 ILCS 5/7-203) requires BI limits of at least $25,000 per person per accident and $50,000 total per accident.
  2. Property Damage (PD) – Pays for damage to another person’s car or property such as fences, buildings, utility poles, signs, and trees.  Illinois law (625 ILCS 5/7-203) requires PD liability limits of at least $20,000 per accident.

Note:  You may want to consider buying higher limits because the state minimums may not be enough to fully protect you from lawsuits.  Many vehicles today are worth more than $20,000 and medical bills for injuries could easily exceed $25,000 for one person.  If you are found negligent in an accident and the damages exceed your insurance limits, you can be sued in court for those amounts not covered by your insurance.

• Uninsured Motorist Bodily Injury Coverage (UM) – Covers you for your bodily injury caused by a hit-and-run driver or an at-fault driver who has no auto liability insurance.  Currently, Illinois uninsured motorist bodily injury minimum limits are $25,000 per person and $50,000 per accident. For additional premium, you may buy higher limits to pay for claims that exceed those amounts.
• Underinsured Motorist Bodily Injury Insurance (UIM) – Pays the difference between your UIM limits and the liability limits of the at-fault driver, if lower than your UIM limits.  Illinois law (215 ILCS 5/143a-2) requires this type of coverage if you purchase higher limits of uninsured motorist bodily injury coverage (UM).

Other Coverages That May Be Required

• Physical Damage – Pays for damage to your auto.  You may have to pay for part of the loss, called a deductible.  Deductibles can range from $0 to $1,000.  Illinois law doesn’t require physical damage coverage, but your lender may.  Depending on the value of your car, you may decide the cost of physical damage coverage is not worth it.  Physical damage is split into two separate coverages:
  1. Collision coverage – Pays for damage caused by an accident with another car or fixed object (such as a tree).
  2. Comprehensive coverage – Pays for damage caused from most other causes, such as theft, fire, hail, etc.

Optional Coverages for Additional Premium

In addition to the required coverages, you can buy optional coverages for extra premium.

• Accidental Death Benefit – Pays a death benefit if the insured dies because of an auto accident.
• Custom/Non-Factory Equipment – Covers customized features found in conversion vans, as well as tape decks, CD players, CB radios, cellular phones, etc. added after the vehicle left the factory.
• Gap Coverage for Leased or Financed Vehicles – Pays the difference between your vehicle’s actual cash value and what you still owe on your loan or lease.
• Medical Payments – Covers medical and funeral expenses for you or your passengers if injured or killed in an accident in your vehicle.  It also covers you and your family members if struck by a vehicle while walking or while riding in another vehicle.  This coverage pays even if you cause the accident.
• Physical Damage/Repair/Replace Coverage – Pays for a new vehicle if the cost to repair your vehicle is more than the value of a new car.  The endorsement is usually available only during the first three model years.
• Rental Reimbursement – Pays a specific amount per day (e.g. $15) to rent a vehicle while yours is being repaired due to a covered loss.
• Towing – Pays all or part of the cost to tow your disabled vehicle to a repair shop.
• Uninsured Motorist Property Damage (UMPD) – Covers damage to your vehicle caused by an identified, at-fault, uninsured driver.  If you don’t’ have collision coverage, this coverage is available for a maximum of $15,000 and subject to a $250 deductible.

Factors That May Affect The Premium

Rating factors are characteristics that place you in a group of drivers with similar risk-related characteristics. Companies set a rate for each group based on the claims paid for the people in that group.

Hundreds of companies sell insurance in Illinois and prices can vary greatly. Some factors companies use to set the cost include:

• Age, gender, and marital status – Statistics show certain groups of drivers (for example, young unmarried males) have more accidents.  A higher chance of loss means more premium.
• Coverage limits – The more insurance you buy, the higher the premium will be.
• Driving record – Drivers with accidents and tickets usually pay higher premiums than those with good driving records.
• Household driving information – The ages and driving records of other drivers in your household may affect the premium.  Most auto insurance policies cover family members while driving your car.  You may jeopardize your coverage if you withhold this information.
• Location – Since heavily populated areas have more traffic, thefts, and vandalism, city drivers may pay higher premiums than rural drivers.
• Type of vehicle – Certain vehicles cost more to insure because they’re more likely to be damaged in an accident, cost more to repair, or are frequently stolen.
• Use of vehicle, how far you drive to work, and annual mileage – Drivers who commute long distances or drive more miles per year may pay more than those who commute shorter distances and drive fewer miles per year.
• Credit history – Companies may consider your financial stability and charge higher premiums based on your financial status (i.e., credit card history, amount of credit, how timely you pay your bills, etc.).

Discounts That May be Available

• Anti-theft devices – Given on your comprehensive coverage for devices that deter theft or vandalism.
• Auto/home packages – Given if you buy your auto and homeowners policies from the same company.
• Car pool – Offered to those in a shared-vehicle car pool.
• College student away from home – For college students who attend school over 100 miles away from home if no vehicle is taken along.
• Defensive driver – Given to drivers over the age of 55 who have passed an approved defensive driving course.
• Good driver – For policyholders who maintain good driving records.
• Good student – Offered to young drivers who maintain a “B” average or better.
• Low annual mileage – For vehicles operated less than a given number of miles per year, usually 7,500.
• Mature driver credit – Offered to drivers over a certain age, usually 50.
• Multiple vehicles – Given when the same company insures more than one vehicle in your household.
• Safety devices – Offered for such items as air bags, automatic seatbelts, and anti-lock brakes.

Ways to Lower Your Insurance Costs

• Ask about discounts.  The type and amount of discounts offered may vary by company.  Some discounts affect a portion of your coverage; other discounts may affect the entire premium.
• Take the highest deductible you can afford.  If you raise your deductible, you may be able to significantly lower the price of coverage; but you will pay more out of pocket each time you have a claim.
• Consolidate your insurance needs.  If you have a need for more than one type of insurance, you may be able to obtain a discount by having all your insurance serviced by one insurance provider.
• Maintain a good driving record.  Moving violations and accidents may result in higher premiums.  Be a law-abiding and defensive driver.
• Choose your vehicle carefully.  Some vehicles are more costly to insure than others.  Contact your insurance producer or company before you make a final decision.
• Keep a good credit history.  Many companies are now looking at your credit information and may charge higher premiums for those with less than perfect credit profiles.

Getting Rate Quotes

A rate quote from an insurance producer is only an estimate of what the insurance will cost.  If the producer quotes the premium incorrectly, the correct amount figured by the insurance company is the price you will actually be required to pay.  Therefore, before you switch companies, ask the new producer to submit a non-bound application for you.

With a non-bound application, there is no coverage and you pay no money.  The producer submits the application to the company and the company lets you know whether you will be accepted and at what price before canceling your current policy.

If You Can't Find Auto Insurance

If you cannot find auto insurance through normal insurance markets because of your driving record or the type of vehicle you own talk to your insurance producer about the Illinois Auto Insurance Plan . To qualify for auto insurance through the Plan, you must meet four requirements:

1. You must be turned down for auto insurance from other insurance companies.
2. You must have a valid driver's license or be eligible to apply for one.
3. You must not owe an outstanding premium for prior insurance coverage during the past 36 months.
4. Your vehicle must be safe to drive.

The premiums may be higher than premiums of companies in the normal insurance markets. However, if you maintain a good driving record while in the Plan, you should be able to eventually return to a standard company.

For More Information

Call our Consumer Assistance Hotline Toll Free at (866) 445-5364.

The Illinois Department of Insurance wishes to advise citizens they should be fully informed before participating in car-sharing programs. Car sharing is the short-term use of a vehicle for which compensation is exchanged through a membership-based organization. Vehicles are available for as short as an hour. Users generally pay for time and/or mileage each time they check out the car.

Individuals should be aware if they are seeking to rent their vehicle through a car-sharing program they likely will be:

• Responsible for damages and injuries stemming from accidents during the rental period.
• Denied coverage under their personal auto policy, including legal defense, if participation in these types of programs is discovered.
• In violation of their associated auto insurance policy and the insurer will most likely cancel the policy.

Contact your insurance agent or company to determine if coverage is excluded on your policy so as not to be in the situation where you have no coverage and your policy is being cancelled.

The Illinois Department of Insurance is charged with protecting consumers by providing assistance and information, by efficiently regulating the insurance industry's market behavior and financial solvency, and by fostering a competitive insurance marketplace. If individuals have further questions concerning car-sharing or any other matters, they may contact the Department toll-free at (866) 445-5364.

What Is Comparative Negligence?

Comparative negligence laws dictate how the responsibility for an accident will be shared between the parties directly involved in an accident where bodily injury or property damage was suffered. In these cases, there are two parties involved, referred to as the insured (1st party) and the claimant (3rd party). When both parties contributed to the accident, comparative negligence determines who will receive compensation for losses and how much will be received. Suppose Jane is speeding down the street and Dick makes a left-hand turn in front of Jane, striking her car. Both drivers contributed to this accident and the insurance company, applying comparative negligence laws, will make the determination of liability for damages.

Illinois has adopted modified comparative negligence (735 ILCS 5/2-1116) as the standard for recovery of damages. Under modified comparative negligence, an injured party may recover damages only if he/she is less than 50% at fault for the injury or damages. However, the recovered amount may be reduced in proportion to the degree that the injured party was at fault. For example, if the other driver is determined to be 80% at fault and you are determined to be 20% at fault, you can collect for your damages because you were less than 50% at fault. However, the other driver's insurance company might only offer to pay for 80% of your damages.

How Is Comparative Negligence Resolved?

The insurance company will make the injured party an offer based on what it believes to be the amount of negligence of its insured. The insurance company may interview the involved parties, including witnesses, and it may also review the accident report in order to determine the amount of the offer. An insurance company may believe that its insured was not more than 50% or more at fault for an accident and may not offer to pay any damages for the loss. The injured party may negotiate with the insurance company until a settlement is reached or until the two parties reach an impasse. If a settlement cannot be reached, the courts make the final determination of comparative negligence.

What Should I Do If I Do Not Agree With The Insurance Company?

You may file a complaint with the Department of Insurance. The Department will contact the insurance company involved and ask for a review of the determination. However, the Division cannot make a determination of comparative negligence. The comparative negligence law is a civil law and is enforceable through the courts.

For More Information

Call our Consumer Assistance Hotline toll free at (866) 445-5364.

Illinois Auto Insurance Plan — https://www.aipso.com/Plan-Sites/Illinois

Listed below are some common auto insurance definitions.

Agent

A representative who sells insurance for one or more companies.

Application

A request for insurance, giving information about the prospective policyholder.

Arbitration

The process in which a third-party arbiter examines facts presented by both you and the insurance company when you disagree about a settlement offer. Arbitration can be binding (the arbiter's decision is final) or non-binding (you can still take the insurer to court if you are unsatisfied).

Auto Replacement Coverage

A supplemental auto insurance coverage that guarantees your car will be completely repaired or replaced, even if the costs exceed its depreciated value.

Binder

A temporary or preliminary agreement, in effect for less than 60 days, that provides coverage until a policy can be written or delivered.

Bodily Injury Liability Coverage

Pays for another person's bodily injury or death in an accident that you may be found legally liable to pay.

Broker

A licensed person or organization you can pay to shop for insurance on your behalf.

Cancellation

Termination of a policy before its normal expiration date.

Claim

Your request for the insurance company to pay you an amount under the terms of your policy.

Claims Adjuster

A person an insurance company hires to settle claims. The adjuster can be a company employee or an independent party under contract with the company.

Collision Coverage

Pays for damage to your vehicle when it collides with another vehicle or object or if it overturns. Your lender may require this coverage if you have a loan on your vehicle.

Comparative Negligence Law

An Illinois law that sets forth how negligence for an accident is determined. Under these rules, you can collect from an at-fault driver only if you are less than 50% at-fault for the accident. In addition, you can only collect for damages in proportion to the amount of fault attributable. For example, if you are involved in an accident and the judge determines you are 20% at-fault for the accident, you can collect from the other driver (since you are less than 50% at-fault) but you cannot collect any more than 80% of your damages from the other driver (since the other driver is only 80% at-fault).

Comprehensive Coverage

Coverage that pays for damage to or the loss of your vehicle from causes other than collision (example: hail, vandalism, flood, fire and theft, etc.) Your lender may require this coverage if you have a loan on your vehicle.

Covered Expenses

The losses or conditions that the policy will pay for.

Custom/Non-factory Equipment Coverage

Covers customized features such as those found on conversion vans, as well as non-factory items such as compact disc players, cellular phones or CB radios.

Declarations Page (“Dec Page”)

A page your company sends you to show your premium and coverage. Some insurance companies only send a new declarations page at renewal unless there’s a change to your policy. You should get a revised declarations page whenever there’s a change to your policy.

Deductible

The dollar amount you must pay out-of-pocket for each claim before the insurance company begins paying.

Gap Insurance

Insurance coverage that pays the difference between what you owe on your auto loan and your totaled car’s actual cash value.

Endorsement

Amendment to the policy used to add, change, or delete coverage. Also referred to as a “rider.”

Exclusions

Specific situations or circumstances listed in your policy describing when benefits will not be paid.

Good Driver Plan

A rating program offered by some insurance companies that reduces your premium if you have had no accidents or traffic violations within a specified time period.

Grace Period

A time period after the due date that you may pay a premium without penalty. The policy remains in force during this time. Not all insurance companies allow grace periods and no Illinois insurance law requires companies to give you a grace period.

Illinois Auto Insurance Plan (assigned risk plan)

A plan for people who can't obtain insurance through the voluntary market.

Illinois Insurance Guaranty Fund

A fund that pays an insurer’s claims when the company is insolvent. All Illinois-licensed insurance companies belong to the Illinois Guaranty Fund.

Insured

The policyholder or person(s) protected in case of a loss/claim.

Insurer

The insurance company.

Lapsed Policy

A policy that has terminated for non-payment of premiums.

Liability Coverage

Insurance protection that pays for claims or judgments brought against the insured.

Medical Payment

Coverage that pays for limited medical expenses if you, a member of your family, or a passenger in your car is hurt in a car accident.

Negligence/Negligent

A determination of fault in an accident caused by your inattention or carelessness.

Non-Bound Application

There is no coverage involved and you pay no money. The insurance agent submits the application to the company to find out whether or not you will be accepted.

Non-renewal

A notice of the insurance company’s refusal to renew your policy prior to the end of the policy term.

Policy

The contract form issued by the company to explain the coverage provided. It is a legal document.

Premium

The price charged for insurance.

Property Damage Liability

Pays for damage to another person’s car or property such as fences, buildings, utility poles, signs, and trees. Illinois law requires PD liability limits of at least $20,000 per accident.

Rental Reimbursement/Transportation Expenses

An optional policy benefit that pays the rental fee (usually $15 to $20 per day) if you must rent a vehicle for a reasonable time while your vehicle is being repaired.

Settlement

After negotiating, the amount you agree to accept from the insurance company as full payment for your loss.

Total Loss

When the cost to repair a vehicle approaches or exceeds the vehicle’s actual cash value.

Towing and Labor Coverage

Reimburses you when your vehicle breaks down or is damaged and must be towed to a repair shop or to another location.

Umbrella Liability Insurance

A policy that "floats" above your other coverage. You must carry a certain amount of underlying liability coverage before you may buy an umbrella policy. This coverage kicks in if you are sued for an amount greater than the limits of your auto policy.

Underinsured Motorist Bodily Injury (UIM) Coverage

Pays the difference between your UIM limits and the liability limits of the at-fault driver, if lower than your UIM limits. The law requires you to have this coverage if you purchase higher limits of uninsured motorist bodily injury coverage (UM).

Uninsured Motorist Bodily Injury (UM) Coverage

Covers you for your bodily injury caused by a hit-and-run driver or an at-fault driver who has no auto liability insurance. Currently, Illinois law requires uninsured motorist limits of at least $25,000 per person and $50,000 per accident.

Uninsured Motorist Property Damage Insurance (UMPD)

Covers damage to your vehicle caused by an identified, at-fault, uninsured driver. This option is only offered if you choose not to purchase collision coverage. Currently, Illinois law requires that the company offer at least a $15,000 minimum with a $250 deductible.

Youthful Driver

Most insurance companies charge higher rates for young drivers between the ages of 16 and 25.

For More Information

Call our Consumer Assistance Hotline toll free at (866) 445-5364.

After an auto accident, one of the first things you may have to do is file an insurance claim for damages.  Even if another driver caused the damage, you have the option to file the claim with either your own insurance company if you have the appropriate coverages (a "first-party" claim) or the other driver's insurance company (a "third-party" claim).

Insurance laws differ with regard to first and third party claims, so it is important that you understand your rights and duties in both cases.  In a first party claim, you have a direct contract that requires your insurance company to fulfill all the conditions stated in your policy.  In a third party claim, you do not have a direct contract with the insurance company and their primary obligation is to their own policyholder.

This fact sheet discusses your rights and duties when you file a third-party claim with another driver's insurance company.  For information on first-party claims, see our fact sheet on "Filing an Auto Claim with Your Own Insurance Company.”

How Much Insurance Must the Other Driver Have?

Illinois law (625 ILCS 5/7-203) requires most motorists to carry bodily injury and property damage liability insurance to help pay for damages they cause in an auto accident.

The minimum amounts drivers are required to carry are 25/50/20: $25,000 per person and $50,000 per accident for bodily injury liability and $20,000 for property damage liability.

What Happens after I File a Claim?

The other driver's insurance company will investigate the claim and will offer a settlement if they determine their insured is legally responsible for your injuries or damages.

In most cases, the insurance company will not settle your claim until you sign a "release for damages."  A release means you agree that the amount offered is the only amount you will ever receive from the other driver and the insurance company.  Be sure you are ready to accept a final amount before you cash the check or sign the release.

In some cases, you and the insurance company may readily agree on the amount of property damage, but you may not be ready to settle the bodily injury claim because of ongoing medical bills.  An insurance company may not refuse to pay your agreed-upon property damage claim because the bodily injury claim is still outstanding.

Who Decides Who is At Fault and How Much They Owe?

Illinois has a "comparative negligence" law (735 ILCS 5/2-1116) which means that more than one person can be at fault in an accident.  Under this law, you can generally collect damages if you are 50.00% or less at fault for the accident.  The settlement can then be reduced by your percentage of fault.

For example, if the other driver is 80% at-fault and you are 20% at fault, you can collect for your damages because you were less than 50% at fault.  However, the other driver's insurance company might only offer to pay for 80% of your damages.

How Quickly Must the Insurance Company Respond to Me ?

Illinois insurance laws (215 ILCS 5/143.23a) require a company to provide forms necessary to present a claim within 15 working days of a request. 

Additionally, Part 919.80(b)(3) of the Illinois Administrative Code requires an insurer to provide a reasonable written explanation of the delay for any property damage liability claim unresolved in excess of 60 days from the date it was reported to the company.

What Kind of Information Must I Provide?

There is no law that sets forth the information you must provide.  However, the insurance company will need to determine:  whether their insured is legally responsible for the accident and to what extent; the amount of your damages or bodily injury; and whether your damages or injuries are directly related to the accident.  Therefore, it is in your best interest to provide as much information as possible to substantiate your claim.  In addition, if you fail to cooperate fully, the company could deny your claim altogether.

How Many Repair Estimates Must I Submit?

The other insurance company may ask for several estimates.  There is no law that states how many estimates you must submit or that limits the number the company may ask for.

May I Choose My Own Repair Shop?

Yes.  You are not required to use a repair shop suggested by the insurance company.  However, if your repair shop charges more than the company’s suggested shop, you may have to pay the difference.

Can the Insurance Company Deduct for Things Like Unrepaired Damage or Rust?

Yes.  The insurance company may deduct an unlimited amount from the value if your vehicle has old, unrepaired collision damages.  They may also deduct an additional amount up to $500.00 for wear and tear, missing parts and rust.   The company must itemize and specify the dollar amounts of those deductions.

Do I Have to Accept Replacement Crash Parts?

No.  Although insurance companies aren't required to use original equipment manufacturer (OEM) replacement parts, such as GM or Ford, you have the final choice of which parts will be used to fix your vehicle.  However, if the company wants to use non-OEM parts and you request more expensive OEM parts, you may have to pay the difference.

My Vehicle is a Total Loss.  May I Keep It Anyway?

To minimize auto "chop shop" crime, Illinois law (625 ILCS 5/3-117.1) lets you keep a totaled vehicle only if it is nine years old or older.  In that case, the insurance company may, but is not required, to let you keep your vehicle.  If you have a newer vehicle, you must give the vehicle and clear title to the insurance company before the claim can be settled.

May I Rent a Car?

Illinois insurance regulations (Administrative Code, Title 50, Subchapter l – Section 919.80) require an at-fault driver's insurance company to reimburse you for the cost of a rental vehicle in proportion to their liability.  The most the company must reimburse you for is the period of time it would normally take to repair your vehicle, or until they make you a settlement offer for your vehicle's damage.

This regulation does not specify the type of rental vehicle.  If your damaged vehicle is a specialty vehicle, the company does not have to pay for a rental of the same type.  If the company offers to pay a flat amount (for example, $20 per day), the company must tell you where you can rent a vehicle for that amount.

What about Personal Property that was in My Vehicle?

The property damage liability portion of the other driver's policy will most likely cover damages to personal property in your vehicle.

What about My Conversion Van or Specialty Equipment?

The property damage liability portion of the other driver's policy will most likely cover your vehicle's specialty equipment such as conversion van equipment, car phones, stereo systems, etc.

What about the Damaged Child Safety Seat in My Vehicle?

Effective June 2, 2000, Illinois law (215 ILCS 5/143.32) requires that insurance for private passenger Autos must include coverage for the replacement of child safety seats if those seats were in use at the time of the accident. 

Do I Have to Pay a Deductible?

When you file a claim with another driver's insurance company, you do not have to pay a deductible.

What if the Insurance Company Denies My Claim or I Disagree with Their Settlement Offer?

If the other driver's insurance company denies your claim or you disagree with their offer, there is no appraisal requirement.  Your only recourse is to:

• make a claim under your own policy if you have the appropriate coverages;
• file suit against the at-fault driver in small claims court, if your damages fall within the county’s limits for small claims suits; or
• seek other appropriate legal counsel. 

Only a judge or jury can ultimately decide who was at fault in an accident or how much another person owes you for your damages.

Must I Conclude My Claim within a Certain Time Frame?

Yes.  You must either accept a final settlement offer, or file a lawsuit, within the time periods required by the appropriate statutes of limitations:

• For bodily injury claims:
  • Within 2 years from the date of the accident; or
  • Within 2 years from the date of your 18th birthday if you were under age 18 when the accident occurred.
• For property damage claims:
  • Within 5 years from the date of the accident, regardless of your age at the time the accident occurred.
• For bodily injury or property damage caused by an accident with a government entity:
  • Within the appropriate time period imposed by the statute of limitation for that particular entity of government.

If you fail to accept a final settlement offer or file a suit before the statute of limitations ends, you may jeopardize your right to receive any settlement at all.

For More Information

Call our Consumer Assistance Hotline toll free at (866) 445-5364.

Printable PDF version 

When your vehicle is damaged or stolen, one of the first things you may have to do is file an insurance claim. Even if another driver caused the damage, you have the option to file the claim with either your own insurance company if you have the appropriate coverages (a "first-party" claim) or the other driver's insurance company (a "third-party" claim).

Insurance laws differ with regard to first and third party claims, so it is important that you understand your rights and duties in both cases. In a first party claim, you have a direct contract that requires your insurance company to fulfill all the conditions stated in your policy. In a third party claim, you do not have a direct contract with the insurance company and their primary obligation is to their own policyholder.

This fact sheet discusses your rights and duties when you file a first-party claim with your own insurance company. For information on third-party claims, see our Filing an Auto Claim with Another Driver's Insurance Company fact sheet.

What Must I Do after a Loss?

• Immediately report all losses directly to your insurance agent or company.
• Immediately report a loss to the police if your vehicle is damaged by a hit-and-run driver, or if you suspect vandalism or theft. Without a police report, your company could deny your claim.
• Show the damaged vehicle to the company before having it repaired.
• Protect your vehicle from further damage. If you don't, your company could refuse to pay for any subsequent damage. For example, if you don't cover a broken windshield and rain damages the upholstery, your company could refuse to pay for the damaged upholstery.
• Cooperate with the insurance company's investigation. If you don't cooperate, your company could deny your claim.
• Review the section of your insurance policy that describes your duties and other possible requirements (sometimes called "Conditions" or "Duties After A Loss").

What Information Must I Give My Company?

• A copy of any legal document you receive as a result of an accident.
• A sworn proof of loss describing the date of loss, how it happened, for what purpose the vehicle was being used, etc. If you don’t submit a required proof of loss within the time period required in your policy, your company could deny your claim.
• Your company may also ask for other documents related to the claim, such as medical and Auto repair bills, a copy of the police report, bill of sale for the vehicle, etc.
• Documents for an examination under oath (e.g. tax documents, medical bills, etc.). If required, you must submit to an exam under oath. If you don’t, your company could deny your claim.

When Will My Insurance Company Contact Me?

Illinois insurance rules require your insurance company to communicate with you within 21 working days after they are notified of the loss.

How Many Repair Estimates Must I Submit?

Your insurance company may ask for several estimates. There is no law that states how many estimates you must submit or that limits the number the company can ask for.

What about Storage Fees?

If your vehicle is undriveable following an accident and it is towed to a storage facility, the storage facility will charge you a daily storage fee. Your insurance company must give you reasonable notice before they stop paying for auto storage charges to give you time to move the vehicle and avoid additional storage charges.

May I Choose My Own Repair Shop?

Yes. You are not required to use your company’s suggested repair shop. However, if your repair shop charges more than the company’s suggested shop, you may have to pay the difference.

Can My Insurance Company Deduct for "Betterment"?

Yes. If your vehicle is being repaired with newer parts, your company doesn't have to pay for the "betterment." For example, if your vehicle's muffler is five years old, your insurance company would have to replace it with a five-year old muffler. If a five-year old muffler can't be found, the repair shop could use a new muffler, but you'd have to pay the difference.

Can My Insurance Company Deduct for Things Like Unrepaired Damage or Rust?

Yes. Your insurance company may deduct an unlimited amount from the value if your vehicle has old, unrepaired collision damages. They may also deduct an additional amount up to $500.00 for wear and tear, missing parts and rust. Your company must itemize and specify the dollar amounts of those deductions.

Do I Have to Accept Replacement Crash Parts?

No. Although insurance companies aren’t required to use original equipment manufacturer (OEM) replacement parts, such as GM or Ford, you have the final choice of which parts will be used to fix your vehicle. However, if your company wants to use non-OEM parts, and you request more expensive OEM parts, you may have to pay the difference.

How Will My Company Determine the Value of My Vehicle?

Companies normally use published guide books or computerized sources to determine your vehicle’s retail value. To make sure you receive the highest value possible, give your insurance company complete information about your vehicle’s condition, options and mileage.

Can My Company Replace My Vehicle?

Yes, as long as the replacement vehicle is:

• comparable to your damaged or stolen vehicle: that is, the replacement is of the same manufacturer, same model year, similar body style, options and price range, in as good or better overall condition; and   
• available for your inspection at a licensed dealer within a reasonable distance from your home.

If your damaged or stolen vehicle is four years old or newer, the company must buy the replacement vehicle through a licensed dealer unless you waive this requirement in writing.

Does My Insurance Company Have to Pay Off My Car Loan?

No. Most insurance policies require your company to pay your vehicle’s actual cash value. If your vehicle’s value is less than your car loan, you must pay the difference. If this happens to you, you should ask your lender about substitution of collateral.

In this scenario, your lender agrees to accept title to your replacement vehicle in place of the title to your totaled or stolen vehicle, and you continue making payments as if your previous vehicle was never totaled or stolen. Lenders aren’t required to do this, but many times, if you’ve been timely in your loan payments and you find a substantially similar vehicle, lenders will agree to this arrangement.

I Found a Car Just Like Mine but It Costs More than What My Company Gave Me for My Car. What Can I Do?

If you can’t find a comparable vehicle within 30 days of receiving a cash settlement for your total loss vehicle, but you find one that costs more, your company will have to:

• Pay you the difference;
• Negotiate a lower cost for the vehicle;
• Buy the car for you, even at a lower negotiated price;
• Find a substantially similar vehicle for you for the amount they offered; or
• Invoke the Appraisal Clause of your policy (See below, “My Company and I Can’t Agree on the Amount of My Loss. What Can I Do?”)
• This requirement does not apply if the cash settlement was based on the value of a replacement vehicle that you rejected.

Does My Company Owe for Taxes, Title and Transfer Fees?

Possibly. If, within 30 days of a cash settlement, you can prove that you bought or leased another vehicle, your company must reimburse you for the applicable taxes, title and transfer fees as follows:

• If you bought a vehicle whose value is less than the settlement amount, your company must reimburse you for the amount you actually paid;
• If you bought a vehicle whose value is more than the settlement amount, your company must reimburse you only for the taxes, title and transfer fees based on the settlement amount.
• If you bought a vehicle after refusing your company’s offer of a replacement vehicle, your company must reimburse you only up to the applicable replacement flat tax.

My Vehicle is a Total Loss. May I Keep It Anyway?

It depends on how old your vehicle is. To minimize “chop shop” crime, Illinois law lets you keep a totaled vehicle only if it is nine years old or older, or if the vehicle has incurred only hail damage that does not affect the operational safety of the vehicle. In that case, your insurance company may, but is not required to let you keep your vehicle. If you have a newer vehicle, you must give the vehicle and clear title to your insurance company before they can settle your claim. Refer to our fact sheet Total Loss Auto Claims with Your Insurance Company (Rule 919 Exhibit A – Rights of Recourse) for more information.

Do I Have to Pay a Deductible?

If you chose a deductible when you bought your policy, your company will deduct that amount from the settlement each time you submit a claim. Keep in mind that insurance companies consider it to be insurance fraud if your repair shop offers to increase your repair estimate to help you recover the cost of your deductible.

May I Rent a Car?

It depends. If your vehicle is stolen, most insurance policies will reimburse you for the cost of a rental vehicle starting 48 hours after the theft, as long as you report the theft to the police and your insurance company. Check your policy for the dollar limits.

For non-theft claims, most Auto policies don’t provide for a rental vehicle unless you bought additional Rental Car coverage for more premium.

Does My Insurance Company Have to Pay for the Special Equipment on My Vehicle?

Probably not. Most Auto policies only cover items that were permanently installed in your vehicle by the original manufacturer. Specialized equipment such as conversion van upgrades, car phones, stereo systems, etc. probably aren’t covered unless you bought special coverage for more premium.

Does My Insurance Company Have to Pay for the Damaged Child Safety Seat in My Vehicle?

Effective June 2, 2000, Illinois law requires that insurance for private passenger Autos must include coverage for the replacement of child safety seats if those seats were in use at the time of the accident.

I Had Personal Property in My Vehicle When It Was Damaged/Stolen. Is It Covered?

Probably not. Auto insurance policies only pay for auto-related equipment. If you had personal items, such as clothing, luggage, gifts, etc. that were stolen from or damaged while in your vehicle, your policy may not pay for them, or may pay only a limited amount. However, if you have a homeowners or renters insurance policy, your personal property may be covered under that policy.

My Company and I Can't Agree on the Amount of My Loss. What Can I Do?

• If you and your insurance company can't agree on the amount of the physical damage loss to your vehicle, either of you may request an appraisal as explained in your policy. Here is how the appraisal process works:
• You choose and pay for an appraiser to represent you.
• The company will choose and pay for an appraiser to represent them.
• The two appraisers will select a neutral third-party umpire (for whom you and your company split the cost, if necessary).
• Both appraisers will give their estimates of the loss.
• If the appraisers can't agree, they will submit their differences to the umpire, and a decision by any two of the three is binding.

For More Information

Call our Consumer Assistance Hotline toll free at (866) 445-5364.

Related Topics

• Filing an Auto Claim with Another Driver's Insurance Company
• If Your Auto Insurance is Nonrenewed
• Auto Insurance Facts for Teen Drivers
• Auto Insurance Consumer Complaint Ratios 
• Total Loss Auto Claims with Your Insurance Company (Rule 919 Exhibit A - Rights of Recourse)

If your Auto insurance company terminates your policy without your permission, your company has certain duties and you have certain rights.  A company may terminate a policy without your permission in three ways:

•  rescission — when the company voids your policy back to the beginning.  There is no coverage at all and the company will return the money you paid;
•  cancellation — when the company terminates your policy before the expiration date;
•  nonrenewal — when the company terminates your policy at the expiration date.

A company's duties and your rights differ depending on whether your policy is rescinded, canceled or nonrenewed.  This fact sheet explains what happens when your policy is being canceled before its expiration date.

Reason for Cancellation

During the first 60 days of a new policy, your company may cancel for almost any reason.  Illinois law allows companies 60 days to look at your risk and decide whether they want to issue you a policy.

If a check, credit card charge, or money order given for the initial premium payment is not processed due to insufficient funds, the new policy may be considered null and void and cancellation provisions will not apply.

After your new policy has been in force more than 60 days, or if you have a renewal policy, your company may only cancel you for one of the following reasons:

If at any time:

• you fail to pay the premium by the due date;
• you obtained the policy through misrepresentation or fraud;
• anyone insured on the policy violated the terms or conditions of the policy;
• you failed to disclose fully your motor vehicle accidents and moving traffic violations for the preceding 36 months if called for in the application;
• anyone insured on the policy made a false or fraudulent claim or knowingly helped someone else make a false or fraudulent claim;
• you or anyone who lives in your household or customarily uses your vehicle:
  • has had their driver's license suspended or revoked in the past 12 months;
  • is or becomes subject to epilepsy or heart attacks, and cannot produce a physician's certificate attesting to their unqualified ability to operate a motor vehicle safely;
  • has an accident record, conviction record (criminal or traffic), or physical or mental condition that might endanger the public safety if they operate an Auto.

If at any time the insured vehicle:

• is so mechanically defective that its operation might endanger public safety;
• is used in carrying passengers for hire or compensation (the use of an auto for a car pool shall not be considered use of an auto for hire or compensation);
• is used in the business of transportation of flammables or explosives, or is an authorized emergency vehicle;
• has changed in shape or condition during the policy period so as to increase the risk substantially; or
• is subject to an inspection law and has not been inspected, or if inspected, has failed to qualify.

If, within the past 36 months:

• you, or anyone who lives with you or customarily uses your auto, has been addicted to the use of narcotics or other drugs;
• you, or anyone who lives with you or customarily uses your auto, has been convicted of or forfeited bail for:
  •  any felony;
  •  criminal negligence resulting in death, homicide or assault arising out of the operation of a motor vehicle;
  •  operating a motor vehicle while intoxicated or under the influence of drugs;
  •  intoxication while in, or about, an Auto or while having custody of an Auto;
  •  leaving the scene of an accident without stopping to report it or for theft or unlawful taking of a motor vehicle;
  •  making false statements in an application for an operator's or chauffeur's license.

Effective January 1, 2003, an insurer is prohibited from canceling your Auto policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months for a loss that is the result of a hate crime committed against the person or property insured if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report.

Notice

The company must send you a written notice explaining why it is canceling your policy.  The notice must also explain two important items:

1. You have the right to appeal the cancellation as explained below under Hearing Rights.
2. You may be eligible to buy insurance from the Illinois Auto Insurance Plan if you cannot find coverage elsewhere.

Mailing Time

 The company must send a cancellation notice to you at your last known mailing address, so it is important for you to notify your insurance agent or company if you move.  The company must mail your cancellation notice:

• at least 10 days before the cancellation date for nonpayment of premium;
• at least 30 days before the cancellation date for all other reasons.

The company must keep proof that it mailed your notice, but it does not have to show proof that you received it.

Hearing Rights

If you believe your company failed to follow the required steps when canceling your policy, you may appeal the cancellation to the Director of Insurance.  To do so, you must:

• have been canceled for a reason other than nonpayment of premium;
• mail or deliver your written request for a hearing to the Department of Insurance at least 20 days before the cancellation date, explaining in detail why you believe the company has improperly canceled your policy.

If your hearing is granted, we will send you written notice about the time and date of the hearing.

For More Information

Call our Consumer Assistance Hotline toll free at (866) 445-5364.

If your Auto insurance company terminates your policy without your permission, your company has certain duties and you have certain rights. A company may terminate a policy without your permission in three ways:

1. rescission — when the company voids your policy back to the beginning. There is no coverage at all and the company will return the money you paid;
2. cancellation — when the company terminates your policy before the expiration date; and
3. nonrenewal — when the company terminates your policy at the expiration date.

A company’s duties and your rights differ depending on whether your policy is rescinded, canceled or nonrenewed. Furthermore, your rights and your insurer’s responsibilities depend upon the nature of the policy, as well as the length for which the policy has been in effect. This fact sheet explains what happens when your private auto insurance policy is being nonrenewed at its expiration date.

Is My Policy a Private Auto Policy?

A private policy of Auto insurance is one that insures at least one natural person and may also insure one or more related individuals that are residents of the same household. These policies apply to private passenger vehicles, station wagons, or any other 4-wheeled motor vehicle with a load capacity of less than 1500 pounds which is not used in any occupation or profession.  If your policy is for a commercial institution the following information may not be applicable.

Why Can My Insurer Nonrenew My Policy?

A company may nonrenew your Auto policy for different reasons depending upon the duration that your policy has been in force. If your policy has been continuously active less than 5 years, please see Nonrenewal of Private Auto Insurance Policy Active for Less Than 5 Years.  If your policy has been continuously active for 5 or more years, please see the appropriate section below labeledNonrenewal of Private Auto Insurance Policy Active for 5 or More Years.

Nonrenewal of Private Auto Insurance Policy Active for Less Than 5 Years

Reason for Nonrenewal

A company may elect to nonrenew your Auto policy for any reason except your age, gender, race, color, creed, ancestry, occupation, marital status, employer of the insured, or physical handicap (as defined in the law).

A company is prohibited from nonrenewing your Auto policy based solely on credit report information. If credit information from your credit report is used to nonrenew your insurance policy, the insurer must provide you with the name of the national credit bureau that supplied the information so that you can get a free copy of your credit report. For more information about credit scoring, see our fact sheet entitled Understanding How Insurers Use Credit Information.

Effective January 1, 2003, an insurer is prohibited from nonrenewing your Auto policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months for a loss that is the result of a hate crime committed against the person or property insured if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report.

Notice

The company must send you a written notice explaining why it is nonrenewing your policy. The notice must clearly articulate the specific reason(s) for nonrenewal. The company may not simply state “fraud” or “misrepresentation,” but rather provide factual basis for such reason(s). The notice must also explain two important items:

• You have the right to appeal the nonrenewal as explained below under Hearing Rights.
• You may be eligible to buy insurance from the Illinois Auto Insurance Plan if you cannot find coverage elsewhere.

Note: If your insurer merges or restructures with another company, or if your insurer reclassifies your policy (possibly due to an excess of claims), the company must mail you a notice about the change 60 days prior to a change in your policy.

Mailing Time

The company must mail a nonrenewal notice to you at your last known mailing address, so it is important for you to notify your insurance agent or company if you move. The company must mail your nonrenewal notice:

• At least 30 days before the nonrenewal date if the policy has been in force less than 5 years

The company must keep proof that it mailed your notice, but it does not have to show proof that you received it.

Hearing Rights

If you believe your company failed to follow the required steps when nonrenewing your policy, you may appeal the nonrenewal to the Director of Insurance. To do so, you must mail or deliver your written request for a hearing to the Department of Insurance at least 20 days before the nonrenewal date, explaining in detail why you believe the company has improperly nonrenewed your policy.

If your hearing is granted, we will send you written notice about the time and date of the hearing.

For More Information

Call our Consumer Services Section at (312) 814-2420 or our Consumer Assistance Hotline toll free at (866) 445-5364 or visit us on our website at http://insurance.illinois.gov/

Nonrenewal of Private Auto Insurance Policy Active for 5 or More Years

Reason for Nonrenewal

A company may elect to not renew your Auto policy for a limited set of reasons if it provides 30 days written notice, or for nearly any reason if it provides you with 60 days written notice (the limited reasons for 30 days notice are available below).  In either case, your insurer may not decide not to renew your policy for reasons of age, gender, race, color, creed, ancestry, occupation, marital status, employer of the insured, or physical handicap (as defined in the law).

Furthermore, a company is prohibited from nonrenewing your Auto policy based solely on credit report information. If credit information from your credit report is used to nonrenew your insurance policy, the insurer must provide you with the name of the national credit bureau that supplied the information so that you can get a free copy of your credit report. For more information about credit scoring, see our fact sheet entitled Understanding How Insurers Use Credit Information.

Effective January 1, 2003, an insurer is prohibited from nonrenewing your Auto policy solely on the basis that one or more claims have been made against any policy during the preceding 60 months for a loss that is the result of a hate crime committed against the person or property insured if the insured provides evidence to the insurer that the act causing the loss is identified as a hate crime on a police report.

30 days written notice

When the company has mailed written notice of nonrenewal of a policy that has been in effect 5 years or more only 30 days before the nonrenewal date, an insurer may only decide to nonrenew your policy for the following reasons:

1. The insured initially obtained the policy through giving misleading or incorrect information to the insurer.
2. Anyone covered under the policy violated any of the terms and conditions of the policy.
3. The named insured failed to disclose fully his motor vehicle accidents and moving traffic violations for the preceding 36 months, if the application requested that information.
4. Anyone covered under the policy made a false or fraudulent claim .
5. Anyone covered under the policy knowingly helped another to make a false or fraudulent claim.
6. Anyone covered under the policy has within the 12 months prior to the notice of non-renewal had his/her driver’s license suspended or revoked.
7. Anyone covered under the policy has or develops epilepsy and does not produce a certificate from a physician testifying to his/her ability to drive safely.
8. Anyone covered under the policy has or begins to experience heart attacks and does not produce a certificate from a physician testifying to his/her ability to drive safely.
9. Anyone covered under the policy has an accident record which is such that his/her driving might endanger others.
10. Anyone covered under the policy has a criminal conviction record which is such that his/her driving might endanger others.
11. Anyone covered under the policy has a traffic conviction record which is such that his/her driving might endanger others.
12. Anyone covered under the policy has any physical condition which is such that his/her driving might endanger others.
13. Anyone covered under the policy has any mental condition which is such that his/her driving might endanger others.
14. Anyone covered under the policy has, within the 36 months prior to the notice of non-renewal, been addicted to the use of narcotics or other drugs.
15. Anyone covered under the policy has, within the 36 months prior to the notice of non-renewal, been convicted of:
    1. Any felony.
    2. Criminal negligence resulting in death.
    3. Homicide arising out of the operation of a motor vehicle.
    4. Assault arising out of the operation of a motor vehicle.
    5. Operating a motor vehicle while in an intoxicated condition.
    6. Operating a motor vehicle while under the influence of drugs.
    7. Being intoxicated while in or about an Auto.
    8. Being intoxicated while having custody of an Auto.
    9. Leaving the scene of an accident without stopping to report.
    10. Theft or unlawful taking of a motor vehicle.
    11. Making false statements in an application for an operator’s license.
    12. Making false statements in an application for a chauffeur’s license.
16. Anyone covered under the policy has, within the 36 months prior to the notice of non-renewal, forfeited bail for:
    1. Any felony.
    2. Criminal negligence resulting in death.
    3. Homicide arising out of the operation of a motor vehicle.
    4. Assault arising out of the operation of a motor vehicle.
    5. Operating a motor vehicle while in an intoxicated condition.
    6. Operating a motor vehicle while under the influence of drugs.
    7. Being intoxicated while in or about an Auto.
    8. Being intoxicated while having custody of an Auto.
    9. Leaving the scene of an accident without stopping to report.
    10. Theft or unlawful taking of a motor vehicle.
    11. Making false statements in an application for an operator’s license.
    12. Making false statements in an application for a chauffeur’s license.
17. Anyone covered under the policy has, within the 12 months immediately preceding the notice of non-renewal, been convicted of 3 or more speeding violations.
18. Anyone covered under the policy has, within the 12 months immediately preceding the notice of non-renewal, been convicted of 3 or more misdemeanor motor vehicle violations of any state, whether or not the violations were repetitions of the same offense or different offenses.
19. Anyone covered under the policy has, within the 12 months immediately preceding the notice of non-renewal, forfeited bail for 3 or more speeding violations.
20. Anyone covered under the policy has, within the 12 months immediately preceding the notice of non-renewal, forfeited bail for 3 or more misdemeanor motor vehicle violations of any state, whether or not the violations were repetitions of the same offense or different offenses.
21. The insured Auto is mechanically defective and driving it might endanger others.
22. The insured Auto is used in carrying passengers for hire or compensation (the use of an Auto for a car pool shall not be considered use of an Auto for hire or compensation).
23. The insured Auto is used in the business of transportation of flammables or explosives.
24. The insured Auto is an authorized emergency vehicle.
25. The insured Auto has changed in shape or condition during the policy period so as to substantially increase the risk of insuring it.
26. The insured Auto is subject to an inspection law and it has not been inspected.
27. The insured Auto is subject to an inspection law and it has not passed inspections.

For all other reasons, your company must mail you written notice 60 days in advance of nonrenewal.

Notice

The company must send you a written notice explaining why it is nonrenewing your policy. The notice must clearly articulate the specific reason(s) for nonrenewal. The company may not simply state “fraud” or “misrepresentation,” but rather provide factual basis for such reason(s). The notice must also explain two important items:

1. You have the right to appeal the nonrenewal as explained below under Hearing Rights.
2. You may be eligible to buy insurance from the Illinois Auto Insurance Plan if you cannot find coverage elsewhere.

Note: If your insurer merges or restructures with another company, or if your insurer reclassifies your policy (possibly due to an excess of claims), the company must mail you a notice about the change 60 days prior to a change in your policy.

Mailing Time

The company must mail a nonrenewal notice to you at your last known mailing address, so it is important for you to notify your insurance agent or company if you move. The company must mail your nonrenewal notice:

• At least 30 days before the nonrenewal date only if the reason for nonrenewal is one of the limited reasons above; or
• For almost any other reason, at least 60 days before the nonrenewal date.

The company must keep proof that it mailed your notice, but it does not have to show proof that you received it.

Hearing Rights

If you believe your company failed to follow the required steps when nonrenewing your policy, you may appeal the nonrenewal to the Director of Insurance. To do so, you must mail or deliver your written request for a hearing to the Department of Insurance at least 20 days before the nonrenewal date, explaining in detail why you believe the company has improperly nonrenewed your policy.

If your hearing is granted, we will send you written notice about the time and date of the hearing.

For More Information

Call our Consumer Services Section at (312) 814-2420 or our Consumer Assistance Hotline toll free at (866) 445-5364.

Congratulations!  By now you’re counting the days until you receive your drivers license.  In preparation, you’re being flooded with all kinds of important information while learning to drive.

Before you take the wheel on your first solo cruise, there is one more thing you should know about – insurance.  Look this information over before you start driving and then discuss the information with your parents or guardian and an insurance producer/agent.

Driving Tips

Teens are generally inexperienced and tend to make more driving mistakes.  Although you may feel comfortable behind the wheel, driving experience takes time and practice.  Follow these tips while driving.

• Always be alert when driving – keep your eyes and ears open.
• Stay focused on your driving – don’t be distracted by passengers, the radio, or a cellular phone.
• Always wear your seatbelt – seatbelts can reduce the risk of fatal accidents.
• Don’t drink and drive – statistics show that 60% of teenagers involved in auto accidents have been drinking.

Under the Illinois Vehicle Code, any person under 21 years old convicted of two traffic violations within any 24-month period will receive a driver’s license suspension by the Illinois Secretary of State.  If you are under age 18, you will be required to successfully complete a driver remedial education course to make your driving privileges valid again.  In addition, you may be required to submit to a complete driver’s license examination to be re-issued a driver’s license.  The length of the suspension will vary according to the seriousness of the traffic offenses.  For more information regarding this law, please refer to the Secretary of State website at www.sos.state.il.us.

Illinois Law

Illinois law requires you to have insurance before you drive.  After you pay for your policy, your insurance company will send you an insurance card that you should keep in your vehicle.  If you get caught driving without insurance, you face a fine and suspension of your license plates.  Before you drive anyone’s car, be sure there’s an insurance identification card.  You can be penalized for driving without insurance in any vehicle.

The easiest, and probably cheapest, way to get insurance is to be added on your parents’ policy.  They can either add you to their vehicle, or if you have your own vehicle (and your parent’s name is on the title of your car), they can add your vehicle to their policy.  In either case, your parents’ rates will increase, so options and costs may need to be discussed.

Required Auto Insurance Coverages

• Liability Coverage – Pays for bodily injury to another person or property damage you cause due to the negligent operation of a vehicle.  It may also pay if the accident was caused by a member of your family living with you or a person using your vehicle with your permission.  The coverage may also pay for a legal defense if you’re sued because of the accident.  Liability coverage is often split into two separate coverages:
• Bodily Injury (BI) – Pays for costs due to injury or death to a pedestrian(s) or person(s) in another car.  It may also cover your passengers’ injury costs as long as they aren’t members of your household.  Illinois law requires BI limits of at least $25,000 per person per accident and $50,000 total per accident.
• Property Damage (PD) – Pays for damage to another person’s car or property such as fences, buildings, utility poles, signs, and trees.  Illinois law requires PD liability limits of at least $20,000 per accident.

Note:  You may want to consider buying higher limits because the state minimums may not be enough to fully protect you from lawsuits.  Many vehicles today are worth more than $20,000 and medical bills for injuries could easily exceed $25,000 for one person.  If you are found negligent in an accident and the damages exceed your insurance limits, you can be sued in court for those amounts not covered by your insurance.

• Uninsured Motorist Bodily Injury Coverage (UM) – Covers you for your bodily injury caused by a hit-and-run driver or an at-fault driver who has no auto liability insurance.  Currently, Illinois law requires uninsured motorist limits of $25,000 per person and $50,000 per accident.  For additional premium, you may buy higher limits to pay for claims that exceed those amounts.
• Underinsured Motorist Bodily Injury Insurance (UIM) – Pays the difference between your UIM limits and the liability limits of the at-fault driver, if lower than your UIM limits.  Illinois law requires this type of coverage if you purchase higher limits of uninsured motorist bodily injury coverage (UM).

If you have borrowed money to buy your vehicle, the bank may require you to also carry comprehensive and/or collision coverages to protect their financial interest in your vehicle.  Depending on the age and value of your car, those coverages may not be beneficial.  If your car is older, the premiums for comprehensive and collision coverage may cost more than the car is worth.  Generally, you can expect to double your insurance premium if you add these coverages to your policy.

Factors That May Affect The Premium

Rating factors are characteristics that place you in a group of drivers with similar risk-related characteristics.  Companies set a rate for each group based on the claims paid for the people in that group.  Here are some tips that may lower your insurance premiums

• Keep a clean driving record.  Drivers with accidents and tickets usually pay higher premiums than those with good driving records.  For example, if you have more than one at-fault accident in less than three years, or if you are convicted of a moving violation, your insurance company could raise your premiums or non-renew your insurance policy.  If your driver’s license is suspended or revoked, your insurance company can cancel the policy.  If you are under your parents’ policy, your driving record will affect their insurance policy.
• Choose your vehicle carefully.  Certain vehicles cost more to insure because they’re more likely to be damaged in an accident, cost more to repair, or are frequently stolen.  If you have a sports car or a high performance car you may have a hard time finding insurance at standard rates.  And if your car is a “street machine” or is “souped-up,” there’s an even greater chance that you’ll pay a lot more for your insurance.
• Drive a vehicle with safety features.  Some companies offer a discount for such items as air bags, automatic seatbelts, and anti-lock brakes.
• Maintain a good credit history.  Companies may consider your financial stability and charge higher premiums based on your financial status (i.e., credit card history, amount of credit, how timely you pay your bills, etc.).
• Keep your grades up.  Some companies offer a discount to young drivers who maintain a “B” average or better.

Insurance Terms You Should Know

• Bodily Injury Liability – Insurance that pays for another person’s bodily injury or death in an Auto accident that you caused.
• Property Damage Liability – Insurance that pays for damage you cause to someone else’s property in an Auto accident.
• Medical Payments – Insurance that pays the medical and funeral expenses, up to the limits purchased, for you or any passengers riding in your car at the time of an accident.  Medical payments will provide coverage whether you or someone else caused the accident.
• Collision – Insurance that pays for damages to your own car if it is involved in a collision, regardless of who is at fault.  Collision coverage may carry a deductible – a stated amount that you must first pay out of your own pocket.
• Comprehensive – Insurance that pays for non-collision losses to your car such as fire, theft, flood, hail, vandalism, glass breakage, and falling objects.  Comprehensive coverage may also carry a deductible.  (Note:  if your car hits an animal, some insurance companies will treat it as a collision claim, while others will treat it as a comprehensive claim.)
• Uninsured Motorist Bodily Injury – Insurance that pays for bodily injury or death to you and your passengers if an uninsured driver strikes your car.  This coverage does not pay for damages to your car.  If you do not have collision insurance, you may purchase uninsured motorist property damage coverage.  This coverage offers very limited protection and should be discussed with your insurance producer/agent.

What You Should Do if You Have an Accident

1. Get medical help for anyone who may be injured.
2. Call the police and follow their instruction.  If you are in an unsafe area, you may relocate to the nearest police station or public place and then call the police.
3. Get names, addresses, telephone numbers, and insurance information of anyone involved in or witnessing the accident.
4. Call your parents or guardian and tell them what has happened and where you are located.
5. Notify your insurance producer/agent or insurance company.

Emergency Information

Keep the following information in a safe place in your vehicle for ready reference in the event of an emergency:

Insurance Company: _________________________________

Policy #: __________________________________________

Agent’s Name: ______________________________________

Agent’s Phone #:  __________________________________

Police Dept. Phone #:  _____________________________

Towing Company:  ___________________________________

Towing Co. Phone #:  _______________________________

If you’re in an accident with another driver, don’t forget to ask:

Driver’s Name: _____________________________________

Driver’s Address:  _________________________________

_______________________________________________

Driver’s Phone #:  _________________________________

Insurance Card Information: ________________________

________________________________________________

________________________________________________

Witness’s Name:  ___________________________________

Witness’s Address:  ________________________________

________________________________________________

Witness’s Phone #:  ________________________________

If You Can’t Find Auto Insurance

If you cannot find auto insurance through normal insurance markets, because of your driving record or the type of vehicle you own, talk to your insurance producer about the Illinois Auto Insurance Plan. 

You must meet four requirements to obtain insurance through the Auto Plan:

1. You must be turned down for auto insurance by other insurance companies.
2. You must have a valid driver’s license or be eligible to apply for one.
3. You must not owe an outstanding premium for prior insurance coverage during the past 36 months.
4. Your vehicle must be safe to drive.

Auto Plan premiums may be higher than those of companies in the normal insurance markets.  However, if you maintain a good driving record while in the Plan, you should be able to eventually return to a standard company.

More Information

Call our Consumer Assistance Hotline toll free at (866) 445-5364.

Printable PDF version 

When you are involved in an Auto accident, one of the first things you may have to do is file a claim with your insurance company for damages to your vehicle. If your car is a total loss, this procedure can sometimes be confusing. The Department of Insurance has established regulations (50 Illinois Administrative Code, Part 919) to protect you when you file an insurance claim with your own insurance company. It is also important that you read your policy carefully so that you clearly understand your responsibilities.

Your Auto insurance policy requires both you and your insurance company to follow certain steps after a loss occurs. This fact sheet summarizes those requirements and outlines your rights. If the insurance company declares your car a total loss, they must provide you the following information within seven (7) days.

Your Duties Following An Auto Insurance Loss

1. You must immediately report all losses directly to your insurance producer or company.
2. If you suspect theft or vandalism, you must also report it immediately to the police. If you fail to do so, your company may deny your claim.
3. You must protect your Auto from further damage. For example, if you fail to cover a broken windshield and the upholstery is damaged by rain, your company can refuse to repair the seat.
4. Most insurance policies require that, within 91 days after the loss, you must submit a sworn proof of loss. A sworn proof of loss usually states the date of loss, how it happened, and for what purpose the Auto was being used. If you fail to submit a proof of loss, your company may deny your claim.
5. You must cooperate with the insurance company, submit to examination under oath if so requested, and show them the damaged property. If you fail to cooperate your company may deny your claim.
6. You should review the Conditions section of your policy for other possible requirements.

Your Insurance Company's Duties

When you file an Auto insurance claim, your insurance company has three options:

1. Replace the damaged or stolen property;
2. Repair the damaged property; or
3. Pay for the loss in cash.

Insurance Department regulations require the company to follow certain standards for each option.

Replacement

If the insurance company elects to replace your vehicle, the replacement must be a specific make and model comparable to your totaled vehicle, and it must be available in as good or better overall condition than your totaled vehicle. Replacement vehicles must be purchased through licensed dealers. Vehicles that are not more than three years old must be warranted. 

If you reject a replacement vehicle, the insurance company must pay only the amount it would have otherwise paid for the replacement vehicle including applicable taxes, transfer and title fees. The company must offer you the replacement vehicle and you must reject the offer.

Cash Settlement

If the insurance company elects to make a cash settlement for your totaled vehicle, they must first determine its retail value. Companies normally use guidebooks or computerized data marketed by various sources.

If your vehicle is not listed in one of these sources, the company can use written dealer quotes. Ordinarily, however, newspaper advertisements are not acceptable sources of market value.

Payment of Sales Tax

If within 30 days of a cash settlement, you can prove that you have bought or leased another vehicle, the company must pay the applicable sales tax, transfer and title fees in an amount equivalent to the value of the total loss vehicle. If you purchase a vehicle with a market value less than the amount previously settled upon, the company must pay you only the amount of sales tax that you actually incurred and include transfer and title fees. Your insurance company must give you written notice of this procedure.

Betterment Deductions

The insurance company is allowed to make deductions from the retail value if your Auto has old, unrepaired collision damages. There is no limit to the amount of the deduction. The insurance company can also make deductions for wear and tear, missing parts and rust, but the maximum deduction may not exceed $500.00. All deductions must be itemized and specified as to dollar amount.

Retaining Your Totaled Vehicle

In an effort to minimize Auto “chop shop” crime, the Illinois Vehicle Code does not permit you the right to retain the salvage once the insurance company has deemed your Auto a total loss. There are only two instances that you may be able to retain your vehicle: 1) if the vehicle has incurred only hail damage that does not affect the operational safety of the vehicle, or 2) if the vehicle is nine (9) model years of age or older.

Right of Recourse

If you cannot locate a replacement vehicle within 30 days of receiving a cash settlement, you may have some additional rights under your insurance contract.

If you cannot purchase a substantially similar vehicle for the market value determined by the company, but you have located a substantially similar vehicle that costs more, the following procedure(s) shall apply:

1. The company shall either pay you the difference between the original settlement and the amount of the substantially similar vehicle which you have located or attempt to purchase this vehicle for you; or
2. The company shall locate a comparable vehicle for you at the market value determined by the company at the time of settlement; or
3. The company shall conclude the loss settlement as provided under the appraisal section of the insurance policy.

Your insurance company must give you written notice of this procedure once your vehicle has been determined a total loss. This chart should assist you in determining the retail value of an average Auto. The value of your Auto may differ if certain options are not listed in a guidebook or if your Auto has excessive wear and tear or old unrepaired damage.

Details	Value
Make of Auto
Model
Engine Size
Type Transmission (Auto/Standard)
Power Steering
Power Brakes
Power Windows
Air Conditioner
Vinyl Roof
Cruise Control
Tilt Wheel/Telescope Wheel
Power Locks
Power Seats
AM/FM Radio
Stereo/Tape
Rear Defog
Mileage: Low/High
Subtotal
Minus Deductible
Total

For More Information

Call our Consumer Services Section at (312) 814-2420 or our Consumer Assistance Hotline toll free at (866) 445-5364.

Related Topics

Filing an Auto Claim with Your Insurance Company